Each time a New Year rolls around, experts and amateurs alike make bold revelations on what the new year will hold. This year is a little different as 2009 comes with more uncertainty than anything else.
There are those that believe we are merely in the beginning stages of a very real and severe recession. There are also those few that insist that the recession is more smoke and mirrors than facts and figures and it’s only a matter of time before we realize it. For our real estate market the truth is somewhere in the middle. It’s important to understand that our city’s economy and our city’s real estate, while not without their connections, are not one in the same. When our economy was thriving, real estate was indeed the goose that laid the golden egg. Now that the economy is not speeding along at the scorching pace it was, it doesn’t mean that real estate has become just as desolate.
Truth be told, real estate remains a very lucrative investment opportunity. Many people incorrectly align real estate with the stock market, especially when specifically considering the real estate market in the GTA. This is faulty for a number of reasons not the least of which is the fact that our real estate market was factually under-valued, when compared to those of like cities, prior to these times of certainty. It’s difficult to assess an economy as comparatively undervalued. There is also the sense that while even blue-chip stocks can seriously deflate for extended, unpredictable periods, blue-chip real estate investments carry less risk. In simplest terms, a home that was valued at $450,000 six months ago and has since fallen to $375,000, will again hit the $450,000 mark, and exceed it, in a matter of time. While I certainly don’t pretend to be an expert on the stock market, I would argue that for the average joe, real estate offers a more practical and attractive opportunity.
All in all I expect more than a few real estate buyer and sellers to look back on their 2009 transactions with fondness rather than tears.
– Amit is a Realtor/Developer with Re/Max. amitp@rogers.com
